Mr. Aydin Kilic reports

HIVE BLOCKCHAIN PROVIDES MAY 2023 PRODUCTION UPDATE AND THE GROWTH OPPORTUNITIES OF ORDINALS AND UNIQUE SATOSHIS

Hive Blockchain Technologies Ltd. has released the unaudited production figures from the company's global bitcoin operations for the month of May, 2023, with 304.6 bitcoin produced in May, and a current BTC hodl balance of approximately 1,950 (as at June 1). Additionally, the company announces it has a treasury of 250 valuable uncommon satoshis mined from block rewards in its wallets. (All amounts are in U.S. dollars, unless otherwise indicated.)

Summary overview:

• Hive produced 304.6 bitcoin in the month of May, from ASIC and GPU mining operations, representing an average of 92.4 bitcoin per exahash, with an average hash rate of 3.30 exahashes per second for the month of May, 2023.
• Hive produced an average of 9.8 BTC per day in May, 2023.
• Hive ended the month with 3.32 EH/s of mining capacity, including ASIC and GPU BTC hash rate.

May, 2023, production figures

Aydin Kilic, president and chief executive officer of Hive, noted: "We are starting to receive shipments of our 1.26 EH/s of ASICs, which was previously announced, and are installing them in our data centres upon delivery. We expect to provide updates on our growing hash rate capacity as we work towards our interim goal of four EH/s, and moreover, we are actively evaluating opportunities in the market for our year-end goal of six EH/s."

The company's total bitcoin production in May, 2023, was:

• 291.4 BTC produced from ASICs from an average hash rate of 3.15 EH/s from ASICs in May;
• 9.4 BTC produced per day on average from ASICs and 92.5 BTC/EH from ASICs in May;
• 3.32 EH/s of BTC month end hash rate as of May 31, composed of 3.17 EH/s of ASIC BTC hash rate and 0.15 EH/s of GPU BTC hash rate;
• Monthly average of 3.30 EH/s, composed of an average of 3.15 EH/s of ASIC mining capacity and average of 145 petahashes per second of bitcoin GPU mining capacity during the month of May;
• This represents a 1-per-cent month-over-month-end increase in BTC ASIC hash rate (April 30 month-end was 3.14 EH/s hash rate), and a 2-per-cent month-over-month average decrease in BTC hash rate from ASICs and GPUs combined (April average BTC hash rate was 3.38 EH/s), due to the GPUs mining algorithm having a higher profit per megawatt hour in April.

Bitcoin global network mining difficulty is volatile

Network difficulty factors are a significant variable in the company's gross profit margins. The bitcoin network difficulty was 48.7 trillion as at May 1, and increased to 51.0 trillion as at May 31, reaching a new all-time high. Accordingly, bitcoin mining difficulty ended the month about 4.7 per cent higher than the beginning of the month.

The bitcoin network difficulty is a publicly available statistic, which reflects the total number of bitcoin miners on-line and is important in analyzing a company's gross profit margins and number of bitcoin produced. These data are available on many websites.

As more people mine bitcoin (difficulty increases), the daily bitcoin block reward, which currently is fixed at 900 bitcoin per day, gets split amongst more miners; thus, each miner receives a smaller portion of the block reward. Conversely, as bitcoin prices fall, mining may be less profitable (or not profitable at all) for may miners, causing them to take their hash rate off the network, and consequently causing the network difficulty to decrease.

Miners with the lower costs of production are generally able to continue their production during these volatile cycles. Not all miners will continuously mine during a given period, and as a result, some miners will produce less bitcoin than expected, relative to their advertised hash rate. For the foregoing reasons, Hive will self-curtail part of its operations if the unhedged spot energy prices are uneconomical, thereby leaving part of its total gross hash rate unutilized.

It is happy that it has been able to upgrade its global fleet during this crypto market downturn.

Satoshis and ordinal technology

With the advent of ordinal technology, a protocol that allows individual satoshis on the bitcoin blockchain to be assigned a unique identifier, now each satoshi (the smallest denomination of a bitcoin possible, being one-millionth of one bitcoin) can be identified and tracked. Hive has mined thousands of bitcoin as a green-energy-focused issuer with bitcoin mining operations.

Every bitcoin has 100 million satoshis, which means many new potential opportunities.

Frank Holmes said: "I have always believed that green and clean bitcoins would over time become more valuable as a digital asset because the supply is capped at 21 million bitcoins. Like Andy Warhol art, when supply is capped and adoption expands over time, the value of his prints have gone up substantially. Now with the explosion in ordinals, we are experiencing new growth with special numbered satoshis."

Mr. Kilic commented: "As a technology company and a pioneer in the bitcoin mining space, Hive is a company of firsts. We therefore ardently pursue innovation where we see advances in our sector. Luxor Technology Corp. has been a great contributor to the bitcoin ecosystem, through software and firmware developments, and leading research insights, to name a few things. We were therefore extremely pleased to learn, in collaboration with Luxor, that Hive possesses 250 uncommon satoshis in our wallets. There will only ever be approximately 6.93 million uncommon satoshis in existence, out of the 2.1 quadrillion total possible satoshis that will ever exist."

Nick Hansen, chief executive officer and founder of Luxor, stated: "At Luxor, we're excited about the proliferation of ordinal theory on bitcoin, which allows information to be inscribed and preserved forever in the bitcoin blockchain. Working with a technology leader like Hive to extract and sell their unique satoshis for a substantial premium has been a pleasure."

Hive has not specified the price which it will be selling its satoshis; however, it will be at a premium.

About Hive Blockchain Technologies Ltd.

Hive went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a sustainable green energy focus.

Hive is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, it is building a bridge between the digital currency and blockchain sector and traditional capital markets. Hive owns state-of-the-art green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source green energy to mine digital assets such as bitcoin on the cloud. Since the beginning of 2021, Hive has held in secure storage the majority of its treasury of ETH and BTC derived from mining rewards. Its shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of bitcoin. Because Hive also owns hard assets such as data centres and advanced multiuse servers, it believes its shares offer investors an attractive way to gain exposure to the cryptocurrency space.

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